Infrastructure Update: Local Concerns Muddy a FEMA Flood Insurance Overhaul

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The last time the federal government did a major rewrite of its rules for building in flood zones, Gerald Ford was celebrating his last Christmas in the White House.

Forty-five years later, almost everyone agrees that the rules need to be updated. The federal flood insurance program is badly underfunded, the maps marking flood zones are inaccurate and climate change is wreaking havoc with long-held assumptions that undergird the whole program.

But if it was easy to update, the Federal Emergency Management Agency probably would have updated its flood regulations long ago. As comments from state agencies, local officials and environmental groups show, the Biden administration faces many tricky questions as it tries to write rules that can soften the blow of increasingly devastating floods.

Hello and welcome back to Route Fifty’s Infrastructure Update, I’m Dan Vock. Today we’re looking at the feedback that state and local governments, among others, have given FEMA as it considers how to craft the new flood rules. The agency hasn’t proposed any specific modifications yet, but it asked for advice on many aspects of the program. That could be a signal it is considering far-reaching changes.

People in the 22,000 communities that participate in the National Flood Insurance Program can buy federally subsidized flood insurance. (Most home insurance policies don’t cover flood damage.) But for communities to take part, they must agree to certain federal land-use restrictions that limit development in floodplains.

FEMA produces flood maps that are used to set insurance rates. Those maps also show the areas at risk of 100-year floods and 500-year floods. Communities have to restrict development in the 100-year flood zone.

But there are numerous problems with the setup. Not enough people have signed up to buy flood insurance, and those that do aren’t paying enough to cover the costs of the insurance. So the program is more than $20 billion in debt to the federal treasury, even though Congress canceled $16 billion in the flood insurance program’s debt in 2017. 

But if everyone in the country that needed flood protection did buy insurance, rates would have to increase 4.5 times their current rates to keep the insurance program solvent, according to a recent analysis.

Meanwhile, FEMA has fallen behind in keeping its flood maps current. They are supposed to be updated every five years, but many are out of date. Plus, critics say the maps don’t reflect risks to properties, because they are based on past data, which doesn’t reflect growing vulnerabilities to extreme weather or sea-level rise brought on by climate change.

FEMA indicated it is considering several changes to the program. Those could include:

• Incorporating the anticipated effects of climate change in future flood maps.
• Requiring construction in 100-year floodplains to be higher than the expected flooding levels during those storms. Many states and localities require buildings to be a foot or more higher than those levels.
• Increasing flood protection requirements for critical infrastructure, like hospitals, power plants or chemical factories.
• Extending flood-protection rules to areas that are outside of the 100-year floodplains that have flooded in recent years.
• Tightening insurance eligibility or taking other measures—like “managed retreat”—to reduce losses on properties that have flooded more than once. (A sixth of all money the flood insurance program has paid out over the last 30 years has gone to properties that have flooded repeatedly.)
• Incorporating protections for endangered species in floodplain regulations.
• Mandating that property owners that sell flood-prone properties disclose the flooding risk to would-be buyers, similar to the disclosures required for lead paint use.

Chad Berginnis, the executive director of the Association of State Floodplain Managers, one of the groups that asked for FEMA to re-evaluate the flood insurance program, said the agency has to change its focus.  

“The program must begin to help communities avoid development in high-risk areas as opposed to the current approach of identifying the high-risk areas on maps and then showing communities how to develop in that area,” Berginnis wrote in a Jan. 27 letter to FEMA officials.

“Better mapping, regulation, mitigation and insurance provisions will provide communities the opportunity to anticipate and reduce flood risk—saving lives and protecting property,” he added.

A Daunting Big Picture

The problems FEMA faces with the flooding program are stark.

Communities are seeing the effects of climate change. In fact, a stretch between the summers of 2018 and 2019 marked the wettest 12-month period in the country since scientists started keeping records more than 120 years ago. The average precipitation in that span was nearly eight inches above historical averages, the Union of Concerned Scientists noted.

While communities rely on FEMA’s maps, those maps are unreliable. When Hurricane Harvey hit the greater Houston area in 2017, for example, three-quarters of the damaged homes were outside of the region marked as the 100-year floodplain in FEMA’s maps, pointed out researchers from the University of Wisconsin-Milwaukee Center for Water Policy.

Only 17% of homeowners in the eight counties most affected by the storm had flood insurance, they noted. Nationally, only 30% of homeowners in vulnerable areas have coverage.

“Furthermore,” the Wisconsin researchers warned, “it is critical to consider the impacts that updating floodplain maps will have on low-income communities and communities of color. In over two-thirds of states, areas with more residents of color have a greater amount of unmapped flood risk.”

Portland, Oregon, said that FEMA’s whole approach to mapping flood risk is stuck in another era.

“Unfortunately, FEMA’s flood map system is still framed within the paradigm of the pre-digital age, with maps being designed to be static and printable and risk boundaries being clearly demarcated by lines defined by decades-old data, if data even exist,” its government relations team told FEMA.

But digital maps “can be dynamic and depict much more nuance,” which would make it easier for regulators to add the appropriate protections for an area, they said. For example, the Portland officials said, FEMA could better react to repetitive losses if its maps showed that a home would be likely to be damaged by floods once a decade instead of once a century.

A Flood of Local Concerns

A major overhaul of the flood regulations could have profound impacts on local communities, and inevitably that prompted responses that ranged from “way to go” to “please, no.”

The New York State Floodplain and Stormwater Managers Association backed strict rules about what could be built in floodplains. It called for a prohibition on new residential, commercial and industrial developments, and only allowing “small unoccupied structures” to support recreation, agriculture or water-related activities.

“Some parts of the floodplain are simply not safe!” the New York group wrote. “In these areas, buildings are at risk, people who use or occupy those buildings are at risk, and first responders who conduct flood rescues are at risk.”

On the Gulf Coast of Florida, on the other hand, Charlotte County Administrator Hector Flores warned that blanket prohibitions would not work.

“Should it be mandated that critical facilities be placed outside the 500-year floodplain, we may not be able to have any such facilities near where the majority of the population in the county lives, or even in the county at all, depending on where those lines are drawn,” he wrote.

The Ohio Department of Transportation balked at the suggestion that FEMA would require buildings to be higher in flood-prone areas.

“It is our opinion that all communities should be able to assess their own level of acceptable risk. At present, these communities are permitted to raise the freeboard requirements and do so if they believe the extra costs will provide a benefit for them,” the agency wrote.

The American Farm Bureau, along with state farm bureaus in California, Idaho, Oregon and Washington, objected to more stringent federal controls, especially if that meant that FEMA would try to regulate common farming practices like tilling fields in flood-prone areas. Farms tend to be located along rivers, where the land is flat and the soil is fertile, the groups noted.

“Farmers do not need another layer of regulation and permit requirements for their own sake,” the farm bureaus told FEMA. “What farmers need is an integrated approach, in which overlapping and often conflicting requirements are accounted for and avoided, so that they may be efficiently and effectively implemented for their intended purpose in connection with a single federal nexus.”

The National Association of Home Builders also pushed back on what they saw as federal overreach. The homebuilders argued that FEMA shouldn’t get in the business of enforcing the Endangered Species Act.

And the group said that applying new flood-proofing standards to existing homes that are renovated could exacerbate housing shortages across the country. “Restrictions on land use, stricter construction standards and mitigation requirements all come with a price tag,” NAHB wrote, and would “make new housing prohibitively expensive.”  

The Los Angeles County Department of Public Works warned that a “punitive approach” toward property owners in flood-prone areas “may be counter-productive and unjust.” The agency noted that many residents had been forced into those areas by redlining and other segregationist policies.

But the nation’s most populous county also resisted the idea that FEMA should encourage “strategic retreat” from frequently flooded properties, saying it be “the last resort.” That has been a politically contentious issue in California, where cliff-hugging homes along the coast are among the most valuable properties in the state and the most vulnerable to sea-level rise.

The Snoqualmie Indian Tribe in western Washington state cautioned FEMA that rivers shifted course frequently in the region, making federal flood maps obsolete quickly, a concern echoed by state officials. Both worry that overly strict rules about building in floodplains also made it difficult to get permission to build structures that would help preserve salmon and other wildlife.

The tribe also cautioned that the federal subsidies for flood insurance also contributed to global warming, because they support turning farm fields into housing subdivisions.

“Ultimately, this fuels a counter-productive cycle in which federal financial and taxpayer burdens for flood risks increase, as development and climate change drive increased flood risk,” the Snoqualmie tribe wrote.

That’s it for this week’s edition. If you haven’t already, consider signing up here for Route Fifty Today, our daily newsletter, where you can stay up to date on the latest trends and best practices happening in state and local government nationwide. If you have news tips or feedback, if you want to share your community’s story, or if you just want to say hello, please email me at dvock@govexec.com and follow me on Twitter at @danvock. Thanks for reading!